By Teresa Rivas
With the proliferation of artificial intelligence, everyone will have their own personal shopper in their pocket. While some retailers may fear that change, it's actually likely to benefit them.
The pandemic ushered in an era when many people became increasingly comfortable with buying nearly anything online, from mangoes to mattresses. The ever-increasing shift toward online sales has set the stage for AI in retail, with plenty of retailers already using it to their benefit.
For many consumers, the jury is still out on whether or not AI is a trustworthy source of shopping information and recommendations. Companies may also have reservations, given their lack of control over the algorithms that power these tools.
Yet that doomsday thinking is misguided, writes Bernstein analyst Aneesha Sherman, who argues that brands will be the big winners from agentic AI shopping.
Her rationale is that it puts brands back in the driver's seat.
At present, most companies -- even major brands -- have no choice but to depend on multi-brand stores, like department stores, sporting goods stores, big box players and beauty retailers for the majority of their sales. These wholesalers naturally take a cut of the profits, meaning that the original brand gets much lower margins on these sales -- usually about 10 percentage points or more -- than it would if it sold to the consumer directly.
However, by 2030, she estimates that a majority of adults will use agentic AI to shop, making it the primary way people search for items. That, in turn, will lower brands' "dependence on multi-brand retail and [improve] their margins and access to customer data," Sherman writes.
Therefore, the shift toward agentic AI could provide a boost for companies like Puma, Ugg- and Hoka-owner Deckers Outdoors, Adidas, Under Armour, Nike, and On Holding that currently get nearly 60% or more of their sales via wholesalers.
Ultimately, Sherman sees the biggest brands getting the biggest benefits, given their ability to "maximize their presence in agentic search results," she writes. "Eventually, as AI gets smarter and shoppers more trusting, there could be a democratization of brands where the agent makes the brand selection," but that seems farther down the line to her, and overall she thinks bigger brands are likely to get the lion's share of the benefit.
Her Outperform-rated stocks are Adidas, Burlington Stores, Nike, On Holding, Tapestry, and TJ Maxx owner TJX.
Sherman isn't alone. Last month, UBS analyst Jay Sole argued that investors weren't fully appreciating the positive impact AI will have on retailers, as he sees it increasing sales without a commensurate rise in costs.
"With AI adoption still in the very early innings, we expect companies to continue driving higher employee productivity as we believe AI will help companies drive higher sales growth and improved efficiencies without requiring the same level of investments in headcount," he writes.
Like Sherman, he thinks that AI will allow brands to collect more valuable consumer data and that the adoption will spread quickly throughout the industry. His favorites also include TJX, along with mall staples Gap and Abercrombie & Fitch, which he believes are "likely ahead of peers with respect to AI adoption," and therefore should see the positive impacts sooner.
Of course consumers may still feel somewhat hesitant -- particularly on the question of whether or not AI actually has their best interests at heart. Nonetheless, with AI becoming increasingly ubiquitous, it might only be a matter of time before most people are taking robot recommendations.
Write to Teresa Rivas at teresa.rivas@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
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May 12, 2026 03:00 ET (07:00 GMT)
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